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GDP revised up to annual 4.1% in first quarter

Kyodo

The economy grew at an annualized rate of 4.1 percent during the first three months of the year in inflation-adjusted terms, upgraded from preliminary data on the back of an upward revision to business investment, the government said Monday.

The January-March growth in real gross domestic product corresponded to a 1.0 percent rise from the previous quarter, the fastest pace of gain in a year, the Cabinet Office said.

The government said in its initial report on May 16 that the country’s economy expanded a real 0.9 percent on quarter, or an annualized real 3.5 percent, in the first quarter of this year, buoyed by robust consumer spending and an increase in exports.

The economy is expected to continue to grow on the back of improved exports and business investment due in part to Prime Minister Shinzo Abe’s economic policies dubbed “Abenomics,” which are aimed at boosting domestic demand and beating prolonged deflation, analysts said.

Continued growth could also help the government carry out a sales tax hike from next year as scheduled.

“Improvement in corporate earnings is likely to affect the income situation of households, supporting consumer spending,” said Mitsumaru Kumagai, chief economist at Daiwa Institute of Research.

“GDP may remain on an upward trend after the April-June period and the economy could move toward a full-fledged recovery track,” he added.

Corporate capital spending was down 0.3 percent during the January-March period, upwardly revised from the 0.7 percent drop reported in the preliminary data.

Private consumption, the biggest component accounting for around 60 percent of Japan’s GDP, was unchanged at 0.9 percent growth.

Exports climbed 3.8 percent, while imports rose 1 percent, the same as in the initial report.

The increase in exports was primarily led by improved economic sentiment in the U.S. in tandem with the recent weakening of the yen, analysts said.